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Thursday, 19 April 2012

'Major economic reforms unlikely before 2014 elections in India'

'Major economic reforms unlikely before 2014 elections in India'

Washington, Apr 19 (PTI) Major economic reforms in India would hit the roadblock and are unlikely to happen before the next Parliamentary elections in 2014, Chief Economic Advisor Kaushik Basu has said.

Addressing a meeting at the Carnegie Endowment for International Peace, a Washington-based think tank, Basu said that relatively less important Bills might go through Parliament.

Post-2014, he said, "you would see a rush of important reforms" and after 2015 India would be one of the "fastest growing" economies of the world.

The new government, if in majority, would start with the reforms in a big way because there is a sense that it needs to pick up, Basu added.

At the same time, he said there are some reforms that need to go into fast gear and identified the opening up of the retail sector as one key reforms in waiting.

India, he said, also needs to address the issue of massive subsidy leakage and that of poor infrastructure. (More) PTI LKJ SA KIM 04191305 NNNN

After the elections, the government of the day would take reforms on fast track and there would be a flurry of reforms, Basu, who is here to attend the Annual Spring meeting of the International Monetary Fund (IMF) and the World Bank, said.

He was addressing the concerns expressed by the Unites States (US) corporate on some recent decisions of the Indian government and its reluctance to initiate the series of next phase of reforms.

Basu said there is a slowdown in decision making. The unearthing of a series of corruption and scams, he argued, is having its own impact on the psyche of the bureaucracy, who are not willing to take risks.

Reforms, he said, have also slowed down because of the coalition government. Another reason for the slowdown is the battle against inflation and drop in agricultural production.

India, Basu said, acted on both the fiscal and monetary policy. Finally, India too is impacted by the global economic slowdown.

"We are going through a difficult year," Basu, who is accompanying Finance Minister Pranab Mukherjee to the IMF- World Bank meet, said, adding that India is trying to go back to fiscal consolidation.